Representing a raft of regional and national commercial developers across the UK, it has been the accessibility to SIPP and SASS pension products that has ensured occupancy recently and Jody Lauder of Petty’s Preston based office asks whether they could hold the key for SME’s looking to invest and acquire their own business premises?
The recent growth in availability and accessibility to SIPP and SASS pension products, combined with the current low base level of property prices means that it has effectively never been a better time to acquire commercial premises via this route, taking advantage of the tax breaks available. Indeed the government has already stated that the public sector pension provision will not likely be sufficient to sustain a reasonable standard of living within 20 years without the significant reforms provided currently; equally, the private sector is being forced to implement compulsory pensions for all employees through amendment to the Pension Act of 2008.
Jody Lauder said: “Property values will continue to grow over the medium to longer term, certainly as the market stabilises and recovers after the effects of credit crunch and recession; commercial property investment for owner occupation or tenant only occupation thereto via pension vehicles is a great way to get capital gain without tax penalty. That said, not every property is suitable for inclusion as sustainability, flexibility, proposed rent levels and specification are all key factors that must be considered.”
Jody further comments that: “Developers we are working with, including Barnfield, Errigal, and Hurstwood offer premises that address all these issues. For example, our recent appointment by Fluid Space to market their premises at Croft Court, Whitehills Business Park, Blackpool for sale or to let identifies criteria for such an investment perfectly; Croft Court comprises an estate that provides a pleasant blend of landscaped low density office park, having generous car parking, office space that has a strong corporate presentation, and the flexibility of occupation for either occupation of the whole or subdivided space on exclusive or inclusive terms”.
“These traits within property allow Pension investors to ensure longevity of return, protect against economic obsolescence giving both scope for rental growth and capital growth thereto, something trustees of such schemes are duty bound to achieve; that said, interest in property investment by way of such a structure need not be solely constrained to offices, as land for occupation or development, industrial units for manufacturing or distribution, high street or trade retail units, as well as some residential entities, all comprise suitable SIPP or SASS investment opportunities.”
Jeremy Hunt of Preston-based SIPP & SSAS provider, Taylor Patterson Associates, said: “SIPP and SSAS pension arrangements can invest in a wide range of UK commercial property which can provide attractive tax advantages. This is particularly useful for owners of small businesses who can buy commercial premises through their pension fund and lease it back to their business.”
He goes on to say that: “Despite the difficult economic conditions over the last few years, investors continue to use their pension fund as a means to purchase and own commercial property. This has provided some pension funds with steady returns over the last few years when other markets have been volatile.”